New York Attorney General Andrew Cuomo said Monday health insurer Aetna Inc. will pay more than $5 million to reimburse thousands of college students across the country who were inappropriately reimbursed.

Formerly known as Chickering in 2003, Aetna Student Health was found to have underpaid at least $5.1 million in student health insurance claims nationwide between 1998 and April 1, 2008 The company will now reimburse claims of more than 73,000 students at 200 colleges.

"Aetna learned that Chickering, an independently operated subsidiary, had underpaid some student health claims from providers who were not part of its network," said Cynthia Michener, an Aetna spokeswoman. "The affected claims represent only 3 percent of the overall Chickering claim volume."

Cuomo said Aetna's subsidiary, Aetna Student Health, used an outdated reimbursement rate to pay students and doctors. He added, "Students were particularly vulnerable to being cheated because they placed their trust in health care plans sponsored by their colleges."

As a part of the settlement Aetna has agreed where appropriate, to pay students or doctors for underpayments, plus interest and any penalties for issues such as late payment and will update the claims processing system for students. Aetna also agreed to hire an independent examiner to monitor the company's compliance and training procedures. All Aetna employees will receive improved training on reimbursement obligations.

"Chickering has corrected the issue going forward and is reprocessing past claims that were affected for additional payments to members and providers," Michener said. The miscalculations were due to Chickering using old data tables, but the company has since corrected the process, Michener added.

Over $ 2 million of the claims were from 21,000 students of New York and Aetna will pay students or where applicable their doctors, more than $5.1 million for underpayments plus interest and penalties which will be calculated as per the governing state law. In New York late payments are subject to 12 % interest.

An investigation by Cuomo's office into the independence of its database used to set reimbursement rates for patients' medical bills resulted in UnitedHealth Group Inc agreeing to a settlement last month. Under this settlement UnitedHealth is to shut down its Ingenix medical billing information service and pay $50 million to finance a new independent database to determine market rates for health-care procedures. Aetna also has agreed to pay $20 million to help establish that database.